Today I saw an interview with the CEO of Amazon Jeff Bezos.

Internet companies have made money quite easily, and they have been spending it quite lavishly also. The business for them is simple compared to traditional business. And thats where Amazon has got an advantage.

Amazon is an online retailer whose business has got online and offline sections. The online part is easy, but the offline part, managing the inventory and the sales and the shipping etc is the hard part. Things become harder when the margins are low in their business.

But the difficult business has helped amazon, it pushed them to be efficient at what they do, and here they are, one amazing company with some amazing set of cheap services.
Their developer services are really cool. We use their S3 storage service for our multimedia blogging and social networking platform Mobshare. They are able to provide all their services so cheap only because of the efficiency they got from their online business.